Increasing Sales With Ad-Funded Payments

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Ad-funded payments are the best for online sellers to increase conversion, sales and revenues. This payment type allows price-sensitive shoppers to buy products they want by trying or buying another …

Ad-funded payments are the best for online sellers to increase conversion, sales and revenues. This payment type allows price-sensitive shoppers to buy products they want by trying or buying another product that they need. Thousands of businesses have made millions using this exciting platform.

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  • 1. Increasing Sales With Ad-Funded Payments What are ad-funded payments? The growth of alternative payments Ad-funded payment platforms How to select the right platform Conclusion
  • 2. N service a company offers, many consumers simply won’t buy because they’re price sensitive. every second. And countless other alternative payment methods have emerged, including ad-funded payment platforms, giving consumers valuable choices and ending This is especially a problem in the $600 the online payment monopoly once controlled by credit billion e-commerce industry, where 60% of all cards. Sellers often attempt to increase conversions transactions end in abandonment, according to from price-sensitive shoppers by offering discounts, which can erode margins. But alternative payment systems increase conversions from price-sensitive buyers can effectively and affordably help solve this problem by by offering discounts, which can erode margins. But dramatically increasing a customer’s willingness to pay. alternative payment systems can effectively and affordably help solve this problem by dramatically increasing a customer’s willingness to pay. a result of their ease of use. Forrester Research reports that 74% of customers have used an alternative means of payment because they prefer the convenience, savings and security of alternative payment platforms to that of What Are Alternative Payment Methods? credit cards. The 2008 Alternative Payments Survey, Alternative payments refer to any method of online conducted by TrialPay, found that more than half of online purchase in which the consumer does not pay the online seller directly via credit card. There are two basic types there is an alternative payment method available. consumers credit and later invoice them for any purchases. The alternative payment system pays the online seller Me Later, PayPal, Pay Later and eLayaway. Value-added alternative payments use standard credit between the consumer and the online seller. The most and PayPal Website Payments Standard. Ad-funded payments are a unique value-added model that has Ad-Funded Payment Platforms has since spread to other verticals. This whitepaper While the convenience, savings and security of alternative focuses on ad-funded payments and how online sellers can leverage this model to increase revenue through online purchases, ad-funded payments are the only increased conversion and higher payouts per transaction. methods that actually increase a consumer’s willingness to pay. Ad-funded payment methods allow consumers   Forrester  Research  reports  that  74%  of  customers   to get a product they want for free by trying or buying a product they need from a blue-chip advertiser. Consumers have  used  an  alternative  means  of  payment  because  they   prefer  the  convenience,  savings  and  security  of  alternative   payment  platforms  to  that  of  credit  cards. hundreds of other offers. The advertiser pays a bounty to acquire a new consumer, which covers the cost of the The current state of the alternative payments industry was free product. shaped largely by the launch of PayPal in 1998. At the time, alternative payments were uncharted territory in an Ad-funded payment platforms enable online sellers to online payments space dominated by credit cards. But PayPal proved to be such an effective payment solution that online auction giant eBay acquired it for $1.5 billion. company might be a great customer for another. In fact, Ten years later, PayPal transacts almost $2,000 dollars the 2008 Alternative Payments Survey found that more
  • 3. than three quarters of online shoppers are more willing Through the ad-funded payment model, online shoppers alternative payment method that offers an incentive. get a free product, service or gift card with every purchase, while online merchants get paid for each transaction using whether they would be more willing to purchase an item through an alternative payment method price for their product—and often even more because the that offered an incentive. advertiser offers typically have a range of payouts that price. For instance, a merchant that generally sells its product for $25 might receive $50 for the completion of a credit card offer and $20 from the completion of an online game offer, which averages $35/unit. processing fees, ad-funded payment systems are absolutely free for online sellers to use. Plus, ad-funded payments can be integrated anywhere on a seller’s site ad-funded payment options can be offered when a To understand the economics behind the ad-funded customer tries to download a trial or free version of a product, as a special promotion on a seller’s home page or when a customer attempts to abandon his cart. sells jeans for $70. Furthermore, an ad-funded payment platform that has is willing to pay $30 to acquire a new customer. direct relationships with advertisers can facilitate powerful A consumer visits Company A’s Web site, but is unwilling to pay $20 for the digital good. The consumer sees an offer to get Company A’s product for free if he pays $70 for jeans from Company B. He buys the jeans and gets Company A’s product for free. Company B pays Company payment platforms can even provide sellers free products A $30 for the customer acquisition, and Company A gets from their advertising partners, which can be used as paid more than the full amount of their product. incentives for shoppers to complete their transactions. purchases, and the revenue generated from the offer process increases both transactions and revenue per reward promotion. title for free through an ad-funded payment method will get paid the acquisition fee from the bluechip advertiser. These brand-name offers often payout well over $20 and most lucrative form of payment on the Web. How to Select the Right Platform Any merchant selling goods online should adopt an ad– funded alternative payment option to optimize sales and increase conversion rates. When choosing a platform,
  • 4. 1. 3. It’s important that ad-funded payment platforms by choosing a platform that associates them with show a variety of offers, but it is equally important that premium advertisers. The most successful online sellers select the platform with the best advertisers. presents through an alternative payment platform is can boost the seller’s brand by association, improve of conversion. sellers to boost their brand equity. Many ad-funded platforms offer survey completions In addition, an ad-funded payment platform that as a way to pay for products, but online sellers should be wary of platforms that predominantly use co- increase conversion rates because consumers are registration offers. Co-registrations are surveys that and trust.   Ad-­funded  platforms  that  work  with  the  highest   It’s imperative for sellers to use a payment platform quality  advertisers  provide  an  excellent  opportunity  for   that will handle their customers’ information as online  sellers  to  boost  their  brand  equity. honestly as they would. 2. While retail offers require a greater commitment than Payment platforms that have stable, direct advertiser spend more per transaction on retail offers and have a greater lifetime value to the advertiser. As a result, sellers get paid more and the advertisers will want to of the pie. The best payment platforms cut out the platforms have a well-balanced selection of offers with varying commitment levels. going direct. As an added bonus, ad-funded payment platforms 4. with direct relationships can host advertiser offers within their payment page—which means users won’t have to leave the seller’s site to complete the offer. offer that a merchant displays must be relevant to its target audience. Most platforms achieve this on a broad scale by presenting offers that would appeal to the majority of shoppers. But some payment platforms If it is necessary for a customer to leave the seller’s site to complete an offer, ad-funded payment platforms points, including gender, geographic location, IP with direct relationships can also co-brand the address, browser type, operating system, connection advertisers’ landing pages. A co-branded landing page speed and, most importantly, information from the seller’s site. Sophisticated targeting ensures that and the payment platform, which enhances the user assures shoppers that they are completing a valid offer and that they will receive their free product. It is also important that an ad-funded payment Ad-funded payment platforms with direct relationships can also facilitate press opportunities with larger has only a few offers for a seller’s Brazilian customers, partners. This allows online sellers to align their for their products and raise awareness of their special local offers in all of the regions where they sell their promotions with the advertiser. products or services.
  • 5. 5. Any product or service might be worth different prices in different regions. Some ad-funded payment TrialPay platforms offer regional pricing, which enables online sellers to price discriminate by geography without presenting consumers with targeted promotions before, during and after transactions. TrialPay invented and patented the ad-funded payment method which drives 6. nearly $200 million a year in transactions. TrialPay has Sophisticated fraud detection is a constant cat-and- served more than 60 million users from top software developers, social games publishers and digital content fraud detection systems involve a dedicated customer support team. A good customer support team will and increase customer retention. Atomico. More information can be found at . See Ad-Funded Payments In Action Conclusion products online have purchased with an alternative payment method because it provides greater convenience and better rewards than credit cards. This means merchants who only accept credit and debit as payment options are leaving money on the table. Ad-funded alternative payments in particular can combat the price sensitivities of consumers by giving them a chance to get a free product by trying or buying something else they need. Any online merchant selling digital goods should adopt an ad-funded payment platform in order to optimize constantly evolving e-commerce landscape. TrialPay, Inc. | www.trialpay.com | best-practices@trialpay.com | © 2010 TrialPay, Inc. All rights reserved
  • 6. Learn more on our blog! • Get free case studies and whitepapers • Watch informative video series • Join the conversation http://blog.trialpay.com